Cevian Capital Takes Stake in UBS Group, Sees Significant Value Potential

By Adria Calatayud

Swedish activist investor, Cevian Capital, has acquired a stake in UBS Group worth €1.2 billion ($1.31 billion), citing substantial value potential in the Swiss financial giant following its successful takeover of rival Credit Suisse.

A Strategic Move

Cevian Capital announced on Tuesday that it now holds a 1.3% stake in UBS. When approached for comment, UBS declined to provide a statement to Dow Jones Newswires.

"The board and management team are doing an excellent job integrating Credit Suisse, and we have been impressed by their commitment to further improve UBS," stated Lars Forberg, Managing Partner and co-founder of Cevian Capital. "Strengthened by the acquisition, UBS has become the largest global wealth manager, boasting unique market positions and formidable financial strength."

Seizing an Opportunity

Cevian's investment in UBS comes six months after the official completion of UBS's acquisition of Credit Suisse. The integration process is expected to be lengthy, requiring careful planning and execution.

According to Cevian, UBS's shares have the potential to reach CHF 50 ($57.67) each if the valuation gap between UBS and its U.S. counterpart Morgan Stanley is narrowed.

UBS Shares Rise as Market Capitalization Crosses CHF87 Billion

UBS, one of the leading banks in Europe, saw its shares close at CHF25.35 on Monday, resulting in a market capitalization of CHF87.76 billion. According to FactSet data, UBS shares were traded at 1.04 times the bank's tangible book value as of September 30th, while Morgan Stanley's valuation stood at 2.02 times.

Impressively, UBS shares have gained 47% since the beginning of the year, outperforming the pan-European Stoxx Europe 600 Banks index, which recorded a 19% gain over the same period.

As of 0806 GMT, UBS shares were trading 1.3% higher at CHF25.67.

Notably, Cevian, a firm specializing in strategic investments in undervalued European-listed companies, has been actively acquiring minority stakes. Cevian focuses on stocks that are often overlooked, misunderstood, or out-of-favor with investors.

In conclusion, UBS's strong performance in the stock market and its ability to navigate challenging times have positioned it as a leading player in the European banking sector.